With the advent of digital transformation, traditional business management methods, such as invoicing and transaction archiving, have evolved to meet modern requirements. Today, for professionals and entrepreneurs, using a certified billing system is not just a measurement solution, but an obligation, especially for those subject to VAT.
In this context, what does using a certified invoicing software really entail? Beyond simply issuing invoices and quotes, it’s about ensuring data preservation, guaranteeing its immutability, and providing a certificate of compliance to the tax administration. In this digital era, opting for a certified software publisher for cash register management and invoicing becomes imperative to ensure compliance and peace of mind for businesses.
In short, each service company, whether in service provision or product sales, can define its own pricing grids to offer quality service to its clients. These lists play a crucial role, not only in determining the selling price, but also in calculating a commercial margin relative to the purchase price. The goal is to frame the content and prices for better budget control, and thus, guarantee adequate service. These pricing grids are essential in financial reports, particularly for comparing sold vs. realized or for anticipating forecasts.
In terms of pricing strategy, we identify two main trends:
- Creating a list of all the profiles or products that you usually offer for sale to your customers.
- Designing a table detailing the phases necessary to produce a packaged offer.
Opting for detailed grids is a real optimization strategy. Indeed, it facilitates payment and the sales process, as your employees save time when creating quotes. The prices, descriptions, and quantities listed in these sheets remain modifiable when creating quotes on Furious. Moreover, with the current technological advantage, it is possible to create pre-loaded content blocks directly on these templates, thus ensuring efficiency and precision.
In this article, you will discover the importance of these pricing tools in marketing strategy, how to develop a standard pricing grid for your agency, and the major challenges agencies face.
The importance of pricing grids
So you’ve heard about pricing grids or rate cards. But why is proper management of pricing grids in an agency crucial? Can it affect the success of your business? [Spoiler: YES]
Pricing grids can truly contribute to the financial success of your business. If they are established, used, and regularly updated, it will be more difficult for your clients to try to lower your proposals, for example. Not to mention the time savings and reduced risk of errors it generates for your operational teams!
By setting standardized rates for your agency’s services, you also set clear expectations for clients. Subsequently, this will positively influence exchanges, and projects will prove more fruitful.
Finally, it prevents simply forgetting to price something. By loading a ready-made template, it’s impossible to forget project management, quality, reports, steering committees, etc.
How to establish a standard pricing grid for your business?
There are a few key elements to consider when setting up a pricing grid in your agency:
- Are you going to establish pricing categories? For example, standard rates (default rates), negotiated rates, rates for non-profit clients, or rates for urgent requests.
- Are you going to establish differentiated rates based on your employees’ profiles? For instance, a consulting director costs the company more than a project manager.
- Do you already know the total cost of your full-time employees (FTE)? You must include salaries and benefits to obtain this amount.
- Do you know the overhead cost per employee for your company? This is calculated by dividing your company’s overhead costs by the total cost of all your full-time employees.
Let’s now examine each of these elements in more detail.
Should rates be differentiated according to the type of project?
Depending on the variety of services offered by your company, you will decide whether or not to create different pricing categories. Perhaps a standard rate will not be sufficient to cover the costs associated with last-minute requests, for example?
Optionally, you can assign a rate card to a client, allowing you to customize prices based on specific agreements. Thanks to quote automation, this rate card will be automatically applied when creating the quote on Furious, thus simplifying the management of negotiated rates.
Should rates be differentiated according to the type of profile?
This question is usually answered by comparing the cost differences per employee. Media or public relations agencies often use a fixed rate card for all their profiles. Differentiated price lists are mainly used in digital agencies or full-service agencies, for projects where multiple profiles collaborate on the same project for a specified duration.
Of course, on Furious you can accumulate as many rate cards as you want, in day/unit/hour rates, by simply returning to the dropdown menu and selecting a new one. It is also possible to customize its content if needed.
How to create a profitable rate card for your agency?
Once you have calculated the total cost of your full-time employees and your overhead costs per employee, increase the obtained amount by 20%. And there you have it!
The three main challenges of rate cards
Setting up a rate card for your company can be simple, but managing it correctly is not always as easy.
Over time, your agency will most likely face common problems related to cost catalogs. Here are the three main challenges:
1. Obsolete rate cards
A good practice to remember: update your price references every year.
Why?
Because your company’s main expenses (salaries and overheads) typically evolve each year, or even more frequently. This will help ensure that you remain profitable and that you are still competitive in the market.
2. Inconsistency in applying established agency rates
From time to time, we all happen to offer an ad hoc discount or worse, agree to do work for free to save a client or a project. Although our job is to offer services, it is essential to respect your rate cards to value your service offering.
3. Updating agency rate cards in one place
To anticipate conflicts and communication problems, it is important that you centralize the management of your rate cards in a business management tool.
The main advantage of updating rate cards in one single place is obvious: everyone has access to the latest rates for your company’s services. This avoids confusion and errors regarding how to bill for services.
Are you perhaps part of an advertising agency? Or maybe you work in a digital agency, an IT services company, or for a software publisher? Depending on the type of business you run, your rate cards will be different.
The essential thing is to standardize the rates for your company’s services and ask your employees to update and follow these rates in order to maintain your financial health.
To learn how to create and implement your rate cards in Furious, contact the Success team!
You may be asking yourself these questions?
01 why is it Important to Structure a Rate Card in My Company?
A well-constructed rate card ensures price consistency, protects your margins, and professionalizes your sales pitch. It also facilitates the work of your teams by giving them a clear framework.
02 What Elements should be Included in a Rate Card?
Your rate card should include your types of offers, your pricing methods (daily rate, fixed fee, subscription…), your conditions (discounts, surcharges, minimum billing), as well as internal profitability benchmarks.
03 how Often should a Rate Card be Updated?
Ideally once a year, or whenever a change impacts your costs, positioning, or offer. Regular updates allow you to stay competitive and profitable.
04 how to Manage Special Cases or Custom Requests?
Starting from a clear rate card, you can more easily evaluate the difference for an atypical project. It is recommended to include a margin of flexibility in your rate cards, while documenting your exceptions.
05 are there Tools to Create and Manage My Rate Cards?
Yes, solutions like Furious not only allow you to build your rate cards collaboratively, but also to link them to your quotes, projects, and profitability indicators. A real time-saver and consistency booster.
